So says a new report on the future of the BBC, published by the Adam Smith Institute, known for its free-market views. The report, Global Player Or Subsidy Junkie?, argues that the BBC is far too inward looking. Its dependence on a compulsory tax means it spends too much energy defending itself with government. The BBC is the only state broadcaster in the world that not funded directly by the state. Instead, each UK household must pay an additional £143 ($227) a year on top of what it already pays in tax. David Graham, the report’s author, says that the BBC invests heavily in “opinion management” rather than being international in its outlook. It spends too much time worrying what politicians think rather than making shows you can export overseas. Scrapping the licence fee and replacing it with voluntary PBS-style subscription, would give the BBC “the global presence of a Hollywood studio, but with a wider range of output than a Hollywood studio,” says Graham.

Replacing the £3.5 billion annual licence fee with a voluntary subscription — topped up by government until 2015 to ensure BBC services don’t suffer for now – would also level the playing field for commercial rivals. Graham argues that the licence fee is an enforced payment system for services available elsewhere for free through advertising. Almost everything the BBC does is matched by the private sector, including classical music radio. The BBC’s massive footprint – combined with its not having to turn a profit – doesn’t leave much space for commercial rivals. Certain key services such as news and children’s programmes would be kept free.

What many people don’t realise is that the licence fee was always meant to be temporary. TV was an experiment introduced after the Second World War, which was the justification for this extra tax. While it’s hard not to sympathise with private broadcasters such as Sky, which complains about the massive leg-up the BBC has – James Murdoch regards the Corporation as one stop short of Bolshevism. He thinks any society that forces people to pay tax for an entertainment service must be mad — it’s instructive to remember that the average UK household pays £508 for BSkyB. Just compare that with the value for money you get forking out £148 for Auntie.